The coronavirus pandemic risks cancelling out recent progress in transitioning to clean energy, with unprecedented falls in demand, price volatility and pressure to quickly mitigate socioeconomic costs placing the near-term trajectory of the transition in doubt.
Policies, roadmaps and governance frameworks for energy transition at national, regional, and global levels need to be more robust and resilient against external shocks, according to the latest edition of World Economic Forum’s Fostering Effective Energy Transition 2020 report published today.
COVID-19 has forced companies across industries to adapt to operational disruption, changes in demand and new ways of working, and governments have introduced economic recovery packages to help mitigate these effects. If implemented with long-term strategies in mind, they could also accelerate the transition to clean energy, by helping countries scale their efforts towards sustainable and inclusive energy systems.
“The coronavirus pandemic offers an opportunity to consider unorthodox intervention in the energy markets and global collaboration to support a recovery that accelerates the energy transition once the acute crisis subsides,” said Roberto Bocca, Head of Energy and Materials, World Economic Forum. “This giant reset grants us the option to launch aggressive, forward-thinking and long-term strategies leading to a diversified, secure and reliable energy system that will ultimately support the future growth of the world economy in a sustainable and equitable way.”
The report draws on insights from Energy Transition Index (ETI) 2020, which benchmarks 115 economies on the current performance of their energy systems – across economic development and growth, environmental sustainability, and energy security and access indicators – and their readiness for transition to secure, sustainable, affordable, and inclusive energy systems.
The results for 2020 show that 75% of countries have improved their environmental sustainability, even as the global average score for this dimension remains the lowest of the three categories assessed. This progress is a result of multifaceted, incremental approaches, including pricing carbon, retiring coal plants ahead of schedule and redesigning electricity markets to integrate renewable energy sources.
However, this hard-won progress highlights the limitations of relying only on incremental gains from existing policies and technologies to complete the transition to clean energy. The greatest overall progress is observed among emerging economies, with the average ETI score for countries in the top 10% remaining constant since 2015, signalling an urgent need for breakthrough solutions – one threatened by COVID-19.
While the gaps between what is required, what is committed, and what is likely to be achieved remain large, the compounded disruptions from COVID-19 have destabilized the global energy system with potential short-term setbacks. Ultimately, greater efforts are needed to ensure that recent momentum is not just preserved, but accelerated in order to achieve the ambitious goals required.
Information courtesy of the World Economic Forum